Tesla Inc. (TSLA) is experiencing a significant downturn, with its stock price falling over 3% in morning trading on Monday, reflecting broader market anxieties following President Donald Trump’s aggressive tariff policies. The electric vehicle (EV) manufacturer, once a darling of Wall Street, is now facing a pivotal moment that could determine its future trajectory.
Analyst Dan Ives from Wedbush Securities, a long-time supporter of Tesla and its CEO Elon Musk, has expressed growing concerns about the company’s current situation. In a recent note, Ives acknowledged that while he maintains a bullish outlook on Tesla, the circumstances surrounding the company have become increasingly precarious. He stated, “This is a pivotal moment of truth for Musk to turn things around… or darker days are ahead.”
Reflecting these concerns, Wedbush has dramatically reduced its price target for Tesla stock from $550 to $315, a staggering 42% decrease. As of mid-morning trading, Tesla shares were down approximately 3.2%, hovering around $231. This decline marks a nearly 39% drop in the stock’s value since the beginning of the year, raising alarms among investors and analysts alike.
Musk’s close ties to Trump have complicated Tesla’s position in the market. Initially a supporter of the former president, Musk has transitioned into a controversial figure, often weighing in on political matters. His involvement with DOGE, an initiative advocating for federal spending cuts and layoffs, has further fueled public scrutiny. The political climate has led to organized protests at Tesla showrooms and facilities across the United States, with demonstrators voicing their discontent over Musk’s political affiliations and the company’s response to the ongoing trade war.
The protests have ranged from peaceful gatherings, such as a recent rally in Boston with over 300 participants, to more violent incidents, including vandalism and threats to Tesla facilities. Reports indicate that since Trump’s inauguration, there have been numerous destructive acts directed at the company, including an alarming incident involving a Molotov cocktail.
The trade war, particularly the tariffs imposed on China, poses additional challenges for Tesla. Ives highlighted that the backlash from these policies, coupled with Musk’s association with Trump, could drive Chinese consumers toward domestic competitors like BYD, Nio, and Xpeng. He warned that Tesla has become a political symbol globally, which could have dire consequences for the brand’s future. “We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self-created brand issues, and this could be a conservative estimate,” Ives noted. In Europe, this figure could be as high as 20%.
As Tesla navigates this tumultuous landscape, the company’s ability to recover and maintain its market position remains uncertain. The combination of political backlash, declining stock prices, and potential loss of customer base presents a formidable challenge for Musk and his team. Investors and industry observers will be closely watching how Tesla responds to these pressures in the coming months.
In conclusion, Tesla is at a crossroads, facing significant hurdles that could reshape its future. The company’s response to the political climate, trade tariffs, and public perception will be crucial in determining whether it can regain its footing or if it will continue to struggle in an increasingly competitive EV market. As the situation unfolds, the eyes of Wall Street and consumers alike will remain fixed on Tesla and its next moves.
